Automotive: Lear announces cuts; Toyota sees sales drops

 Tier One automotive supplier Lear (Southfield, MI) is hoping to wring $150 million from a series of cost-reduction moves, including accelerating low-cost engineering and sourcing, consolidation of its supply base, temporary layoffs, and other moves. Lear Chairman, President, and CEO Bob Rossiter said in a statement that his company is working to “stay ahead of the curve” of continued automotive production cuts.

Lear still forecasts global growth in automotive demand, with recover for mature markets expected in 2010, while emerging markets continue to expand. Lear already drew $400 million from its revolving credit line as a defensive maneuver against any credit-supply interruptions. At the end of the third quarter, Lear had more than $500 million in cash.

The company already reduced its full-year sales outlook from $15 billion to approximately $14 billion, with income forecast to be down 20% from $600 to $550 million.

Lear cited a rapid decline in North American vehicle sales and production, a “major shift” to smaller passenger vehicles in the U.S., and slowing sales and lower production in Europe as reasons for the lower guidance.

On Oct. 1, Toyota reported that its September sales of 144,260 vehicles marks a decrease of 29.5% from last September, with the year-to-date (CYTD) sales total of 1,793,303 units, down 10.4% from the same period last year. The largest decrease has been in its light trucks division, with sales of 49,303 off 36% from the year-ago month.